Substitute Holidays & Replacement Leave in Malaysia: HR Guide

Public holidays are something every employee looks forward to, but for employers and HR teams, they also bring a few responsibilities.

What happens if a public holiday falls on a weekend? Can it be shifted?

And what if an employee needs to work on that day? In Malaysia, these situations are covered by substitute holidays and replacement leave.

This article explains how they work, what the law says, and how you can manage them clearly and fairly in your company.

What are Substitute Public Holidays?

A substitute public holiday is when an employer changes a public holiday to another working day.

This usually happens when a public holiday falls on a weekend or overlaps with another holiday.

In Malaysia, there are 11 gazetted public holidays each year.

Out of these, 5 are compulsory public holidays under the Employment Act 1955. These include important dates like National Day and Malaysia Day.

The other 6 holidays are non-compulsory, which means the employer can choose them.

Employers must inform employees about these chosen holidays before the new calendar year begins.

Important Note for Employers:

You cannot replace the 5 compulsory public holidays.
You can substitute the 6 non-compulsory public holidays, but you must inform employees in advance.

This rule helps both employers and employees plan their work and rest days better.

Legal Provisions Under the Employment Act

Section 60D of the Employment Act 1955 covers employee entitlements for public holidays.

Here are the key takeaways:

Employers have the right to substitute non-compulsory public holidays, but they must inform employees early before the start of the calendar year. This helps employees plan ahead.
For substitution to be valid, written notice must be clearly displayed at the workplace.
If a holiday like Malaysia Day falls on a weekend and the company wants to observe it on Monday instead, this is permitted as long as proper notice is given.
Employees cannot be made to work on the 5 compulsory holidays unless they are properly compensated.
Employers must also follow the PDPA (Personal Data Protection Act) if employee data is involved during holiday planning or announcements.

How to Arrange Substitute Public Holidays

There’s no one-size-fits-all approach, but there are some best practices that can help avoid confusion or complaints:

Display substitution notices clearly at the workplace before the new year starts.
If a public holiday falls on a rest day (such as Sunday), you can move it to the next working day, like Monday.
If your company operates across different states, remember that state holidays differ. A public holiday in Selangor may not be observed in Johor. In this case, it's good to have clear policies for staff working outside their home state.

Example scenario:

In 2024, both Maulidur Rasul and Malaysia Day fell on September 16. Since Malaysia Day is compulsory, it must be observed. However, companies that also recognise Maulidur Rasul need to provide a replacement day, such as September 17, or another date agreed upon with the employee.

What is Replacement Leave?

Replacement leave is time off given to an employee who has worked on a public holiday.

Instead of paying extra wages for that day, the employer may offer a replacement day off. However, this can only be done if both the employer and the employee agree.

It’s important not to confuse replacement leave with substitute holidays. They are not the same thing.

A substitute holiday is when a public holiday is moved to another date.

For example, if a public holiday falls on a Sunday, the employer might shift it to Monday. This is usually done ahead of time and applies to everyone in the company.

Replacement leave, on the other hand, only applies to employees who actually work on a public holiday.

It is given afterwards, on a separate day, as compensation for working during the holiday.

When Can Employers Offer Replacement Leave?

According to Section 60D(3) and 60D(4), if employees work on a public holiday, they must be paid two days’ wages in addition to their normal holiday pay.

However, for employees not covered under these sections (usually higher earners), companies may discuss replacement leave or other arrangements based on mutual agreement. The key is clear communication and proper documentation.

Replacement Leave Policy Best Practices

A well-written replacement leave policy helps avoid disputes. Here are some things to consider:

Clearly explain when replacement leave applies, which only applies when employees work on public holidays, not for every weekend task.
Create a form or system to track and approve leave requests.
Keep records to protect both the employer and the employee in case of misunderstandings.
Make sure the policy is included in your staff handbook or employment contracts.

Sample policy statement:

“If an employee is required to work on a gazetted public holiday, the company may provide paid replacement leave within 30 days, subject to approval from the department head.”

Handling Disputes or Complaints

Sometimes, issues still arise even with policies in place. Common complaints include not being informed of substitution dates or not receiving pay for public holiday work.

To handle these concerns professionally:

Refer to the Employment Act or your company’s policy to explain your actions.
Talk to employees privately and respectfully. Let them explain their side and listen carefully.
Keep records of notices, approvals, and leave granted to protect your company from legal trouble.

If the matter cannot be resolved internally, employees can bring the issue to the Labour Department (JTKSM).

Replacement Leave Request Form Template

Here is a Replacement Leave Request Form Template:

[Company Name]
Replacement Leave Application Form
(For HR & Employee Use)

Employee Details

Employee Name: ____________________________
Employee ID / Staff Number: ____________________________
Department / Unit: ____________________________
Position: ____________________________
Contact Number: ____________________________

Reason for Replacement Leave

Date(s) Worked: ____________________________
Day(s) of the Week: ____________________________
Reason for Working on Day Off: ____________________________ (e.g., Project Deadline, Emergency Work)
Total Hours Worked: ____________________________

Replacement Leave Details

Date Requested for Replacement Leave: ____________________________
Number of Hours / Days: ____________________________
Replacement Leave Type: ____________________________ (e.g., Full Day, Half Day)

Approval

Approving Manager’s Name: ____________________________
Signature: ____________________________
Date: ____________________________

Employee Acknowledgement

I confirm that the details provided above are accurate. I understand that my request will be processed in accordance with the company's leave policy.

Employee’s Signature: ____________________________
Date: ____________________________

Subtitue Holidays vs Replacement Leave in Brief

Aspect	Substitute Holiday	Replacement Leave
Definition	A holiday that is given on a different day if the original holiday falls on a non-working day.	A leave given to an employee as a replacement for a holiday worked on.
Purpose	To allow employees to observe a holiday on a day other than the original holiday.	To compensate employees who work on a public holiday with an alternative day off.
Eligibility	Generally for employees whose regular off day falls on the public holiday.	Employees who work on a public holiday are usually eligible.
Common Usage	Common in industries where employees work on weekends or non-standard days.	Common in sectors where working on public holidays is required (e.g., retail, healthcare).
Payment Impact	Typically, no extra pay, just a shift in the day off.	Often includes extra pay (e.g., overtime or holiday pay) on top of replacement leave.
Timeframe for Use	Usually must be used within a specified period, such as the same week or month.	Must be used within a set time frame after working the holiday (often within the same month).
Example	If a public holiday falls on a Sunday, an employee may be given the following Monday off instead.	If an employee works on a public holiday, they can take another day off as a replacement.

FAQ

Can I substitute any public holiday with another day?

Only non-compulsory holidays can be substituted. The 5 compulsory holidays under the Employment Act must be observed on the actual day.

Is it legal to require employees to work on public holidays?

Yes, but they must be compensated, either with double pay or, in some cases, replacement leave, depending on their contract and role.

How much notice must I give for a substitute holiday?

The list of substituted holidays must be displayed before the start of the calendar year.

What is the compensation for working on a public holiday?

Employees covered under the Employment Act receive two days’ wages plus their holiday pay.

Is replacement leave mandatory if an employee works on a public holiday?

Only if mutually agreed and the employee is not entitled to double pay under Sections 60D(3) and 60D(4). Otherwise, cash compensation is required.

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